The Taylor rule for federal funds targeting places
A) no weight on the inflation gap.
B) equal weight on the inflation and output gaps.
C) more weight on the output gap than the inflation gap.
D) more weight on the inflation gap than the output gap.

Question

Quizplus · Accepted Answer

The Taylor rule for federal funds targeting places equal weight on the inflation and output gaps. This means that both inflation and output gaps are taken into consideration when determining the appropriate level of the Federal Funds rate. This approach is believed to help achieve price stability and promote maximum sustainable economic growth.

The Taylor Rule for Federal Funds Targeting Places